London, Sep 1: The India-UK Free Trade Agreement (FTA) signed between Prime Ministers Narendra Modi and Keir Starmer on July 24 will slash trade tariffs from 15 per cent to 3 per cent and boost business confidence in an increasingly volatile world, the British Parliament was told on Monday.
As members of Parliament returned to the House of Commons in London after the summer recess, UK Business and Trade Secretary Jonathan Reynolds tabled a statement to update MPs on the pre-ratification process underway before the trade deal can come into force.
The India-UK Comprehensive Economic and Trade Agreement (CETA), as the FTA is officially known, must be ratified under the UK’s Constitutional Reform and Governance Act 2010 (CRaG) for the requisite legislation to pave the way for the deal’s implementation phase.
“This agreement drops the average Indian tariff on UK products from 15 per cent to 3 per cent, with tariff duties falling around 400 million pounds from entry into force, rising to 900 million pounds after staging,” noted Reynolds in his Commons statement. “It is expected to increase bilateral trade by 25.5 billion pounds, increase UK GDP by 4.8 billion pounds, and boost wages by 2.2 billion pounds every year. We are showing the world that we stand for free, fair, and open trade. In an increasingly unstable and volatile world, this deal provides businesses with confidence as they grow and expand,” he stated.
Reynolds, who negotiated the deal with Commerce Minister Piyush Goyal, highlighted how the India-UK CETA secures “unprecedented” preferential access to India’s federal procurement market, locking in guaranteed market access for UK service suppliers, and making trade “quicker, cheaper, and easier” through improved customs and digital processes. “This agreement will unlock new opportunities for businesses in every corner of the UK, including an expected 190 million pounds boost for the West Midlands and Scotland and 210 million pounds for the North West of England. The deal also aligns with our ‘Industrial Strategy’, supporting the UK’s high growth sectors. And as India grows, so will the opportunities for the UK, giving businesses a competitive edge with the fastest growing economy in the G20,” the statement reads. The Cabinet minister also informed Parliament about the formal commissioning of the Trade and Agriculture Commission (TAC) as well as the Food Standards Agency (FSA) and Food Standards Scotland (FSS) to provide independent advice for the government’s report under Section 42 of the Agriculture Act 2020. It is only after these have been laid before Parliament that the British government can begin the processes under CRaG in order to ratify the trade agreement.
“All needed legislation to implement the agreement will follow standard procedures. In parallel, negotiations for the Double Contribution Convention will be finalised, which will then also be subject to the CRaG process,” added Reynolds.
The Double Contribution Convention (DCC) was agreed alongside the FTA to prevent temporary foreign workers duplicating social security contributions in both countries. The India-UK CETA, signed off during Modi’s visit to the UK in July, targets doubling of bilateral trade to USD 120 billion by 2030. While in India the deal requires only a Cabinet nod, in the UK it involves a Parliament ratification process, which is expected to take up to a year.
In the House of Lords, Department for Business and Trade junior minister Baroness Maggie Jones tabled the statement to update peers on the progress of the FTA. (PTI)
